China's chip leader YMTC sued a U.S. company for patent infringement, and both sides responded with the latest response
ZHITAI, a consumer SSD brand of YMTC (Image source: YMTC official website)
Recently, it was reported that China's memory chip leader Yangtze River Storage (YMTC) has sued Micron Technology Co., Ltd. (hereinafter referred to as "Micron") and its wholly-owned subsidiary Micron Consumer Products Group Co., Ltd. in a U.S. court on November 9, involving patent prosecutions. In the complaint, YMTC alleges that Micron infringed eight of its U.S. patents and that the lawsuit is to terminate Micron's extensive and unauthorized use of YMTC's patented innovations.
In this regard, on the afternoon of November 13, YMTC responded in a statement displayed to Titanium Media App:
"While we are unable to discuss the details of the pending lawsuit, I can confirm that YMTC recently filed a lawsuit in the U.S. District Court for the Northern District of California, alleging that Micron Technology Inc. infringed our company's patents related to the design, manufacture and operation of 3D NAND technology. Just as we are committed to the pursuit of progress and product innovation, we are deeply committed to protecting our intellectual property. We are confident that this matter will be resolved soon. ”
Micron Technology responded to the Titanium Media App earlier: Micron does not comment on pending lawsuits.
Screenshot of YMTC v. Micron Technology (source: official website of the U.S. District Court for the Northern District of California)
With the development of the semiconductor industry, memory chips, as one of the key components, have become the focus of competition among technology companies.
It is reported that YMTC is China's largest manufacturer of flash memory chips (3D NAND Flash), founded in 2016 and headquartered in Wuhan, Hubei. According to its official website, YMTC has a total investment of 220 billion yuan, more than 8,000 patent applications, and more than 6,000 engineers. According to a document in September last year, citing Gaorong Capital's investment intention information in 2021, the pre-investment valuation of Yangtze River Storage reached 160 billion yuan.
NAND Flash and DRAM are currently the two most important storage media, NAND Flash can be used to make SSD (solid-state drive) and other memory, which is used in mobile phones, servers, PCs and other products. According to TrendForce, in the second quarter of 2023, Samsung, Kioxia, SK hynix, Western Digital, and Micron accounted for 31.1%, 19.6%, 17.8%, 14.7%, and 13% of the global NAND Flash vendors, respectively, while other manufacturers accounted for only 3.8%.
However, in 2021, YMTC's global market share in the field of flash memory chips has reached 4%, second only to competitors such as Samsung, SK hynix and Micron Technology in China.
In October 2022, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued new export control rules restricting U.S. companies from exporting chip manufacturing equipment to China, including the production of DRAM (dynamic random access memory) chips of 18nm or less and NAND flash memory chips of 128 layers or more. In addition, BIS requires restricting Chinese factories from importing technology and equipment needed to produce chips for advanced processes. On December 15 last year, the U.S. Department of Commerce added 36 technology companies, including YMTC and Cambrian, to the "Entity List".
Founded in 1978, Micron Technology is a leading global manufacturer of innovative memory and storage solutions. In March 2007, Micron Technology established its first factory in Xi'an, China, mainly to produce DRAM and NAND memory chips. Micron currently has operations centers in Xi'an, Shanghai, Beijing and Shenzhen in China. In June, Micron announced plans to invest more than 4.3 billion yuan in its Xi'an packaging and testing plant over the next few years.
In the complaint, YMTC mentioned that Micron used YMTC's patented technology to defend itself against competition from YMTC and to gain and protect market share. Micron does not pay fair patent fees, but is free to exploit YMTC innovations. The lawsuit aims to address one aspect of Micron's attempt to prevent competition and innovation by forcing YMTC out of the 3D NAND Flash market.
YMTC alleges that Micron infringed U.S. patent Nos. 10,950,623,11,501,822, 10,658,378, 10,937,806, 10,861,872, 11,468,957, 11,600,342 and 10,868,031. Micron's alleged infringing products include 96-layer, 128-layer, 176-layer and 232-layer 3D NAND products.
In the above indictment, YMTC emphasized that YMTC is no longer an upstart, but has become a significant player in the global 3D NAND market, and said that Micron is threatened by YMTC's rise.
In 2018, YMTC mass-produced the first generation of 32-layer 3D NAND Flash chips, in 2019 it mass-produced 64-layer 256Gb TLC 3D NAND flash memory, and in 2020, it skipped 96 layers to develop two 128-layer flash memory products. YMTC has also previously promoted the expansion of production capacity. According to TrendForce's analysis, in the third quarter of 2022, due to the expansion of YMTC client SSD shipments, the price war became increasingly fierce, and OEMs had to expand their bargaining space to attract customers to increase the number of orders.
TrendForce recently stated that looking forward to 2024, the market will need to pay attention to whether the production reduction of memory chips and the decline in inventory can continue to be transferred to buyers, and whether the increase in production capacity and the recovery of market conditions may lead to an imbalance between supply and demand, and whether the terminal demand will recover as expected, in which the sustainability of AI-related orders will be the focus.
Micron's director of business development for Asia Pacific recently said that by the end of this year, inventory levels of storage manufacturers will begin to normalize. In 2024, it is believed that the storage market will achieve significant year-on-year growth. The annual growth of the cloud and hyperscale SSD market will significantly outpace that of the enterprise market, and this trend will continue through 2027.
(This article was first published on the Titanium Media App, author: Lin Zhijia)